Unions – Vandals & Extortionists

The recent debacle with Qantas has rekindled my thoughts about the union movement in general. I firmly believe that unions are, in general, a negative influence on our society and many of their activities amount to blackmail and economic vandalism. While there are some legitimate roles for unions, such as providing advice to members and legal representation when the need arises, the bulk of contemporary union activity centres around industrial action, or, as I like to call it, extortion.

When someone gets a job at a business, they agree to do a certain amount of work for a certain amount of pay. It is not an agreement entered into solely on one side. It is not an agreement forced onto one side by the other. It is a voluntary, mutual agreement. I find it outrageous that, after entering an agreement voluntarily, that one side (in this case the unions) retrospectively decide that actually, on second thought, they want more than they agreed to. Then, to achieve that aim, they engage in strike action, with the aim of blackmailing the business by threatening them with bankruptcy if they don't acquiesce. This is extortion.

Imagine that you hired someone to help clean your house, and you agreed to pay them $10 an hour to help you out. Then, a few weeks later they turn up outside your house with a bunch of mates, threatening signs and refusing to work unless you agree to $20 an hour. Would you (a) give them $20 an hour, or (b) fire them an hire someone else who is willing to do the work they agreed to do? This example precisely reflects what's happening in the union movement around the world.

You might say, why not give them $20 an hour - they'd be better off, it's only fair? The answer is, simply, that it drives unemployment. Why employ one person for $20 an hour when you can employ two for $10? Thus, the activities of unions effectively act as a driving force for unemployment.

Those in support of unions frequently claim that unions are there to represent workers. This couldn't be further from the truth. Unions do not represent workers, they represent paying members. Therefore, those who are not represented by the unions, and I'm specifically referring to the unemployed, get no representation whatsoever and lose out. I'd rather have solidarity with someone who is unemployed and priced out of a job, than someone with a job and a comfy lifestyle, who simply wants more.

Indeed, it is questionable whether union activity even benefits the members. When people earn more money without a corresponding increase in productivity, people have more money with which to buy goods, but the amount of goods hasn't changed. This is inflation. When inflation occurs the RBA responds by increasing interest rates, which means that everyone is paying more on their mortgage, more on their car loan, more on their credit card, and no one is better off.

Some hardline critics of unions advocate banning unions as a solution to the problem. This solution involves taking away people's freedom of association. So, how do we prevents these kinds of activities without taking away freedom? By giving more. Specifically, employers should be allowed to discriminate against employees on the basis of union membership. They should have the right to say "we'll employ you, provided that you don't join the union and engage in strike action", and negotiate these terms into the employment contract. Secondly, because industrial action amounts to extortion, employers should be free to fire employees engaging in that kind of action and litigate for losses. This solution addresses the problem, without depriving anyone of inalienable rights.

I hope the outcome with Qantas strengthens the public's skepticism of the union movement and opens people's eyes to the true nature of collective action. It's time society recognised the true face of unions. They are not there to help people out or make sound economic decisions. They are there to accumulate power into the hands of union bosses and thugs so they can later run for public office and become a minister (or undemocratically overthrow a Prime Minister). This needs to stop.

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3 thoughts on “Unions – Vandals & Extortionists”

“It is not an agreement forced onto one side by the other. It is a voluntary, mutual agreement”

Sorry, I disagree. Those with the resources (money) are usually the stronger side and can impose their will, if there are no rules that give the other side certain rights including those to strike. History has shown that unions had an enormously beneficial influence on workers’ rights (salaries, health benefits etc.etc.). Of course there has been misuse of these rights, but this applies to both sides.

Having money doesn’t make one side stronger. Having a monopoly does. In our present-day economy, irrespective of your educational background, there are typically thousands of prospective employers. This high liquidity in the labour market makes it impossible for any single prospective employer to take advantage of workers and force them into contracts they don’t want to enter. If one employer offers a contract that is unacceptable, then go to any of the hundreds of others. They can’t force you to do anything. The only exception to this rule is when a single employer has a monopoly over the labour market in a given industry. In Australia I have seen little evidence that this is the case. In fact the opposite is the case. In highly unionised industries (of which there are increasingly fewer in today’s economy), it is the unions who have a monopoly over the labour market, not the employer.

> History has shown that unions had an enormously beneficial influence on workers’ rights (salaries, health benefits etc.etc.)

This is precisely the problem. When unions use collective action to achieve higher salaries and benefits, at a rate faster than economic growth, these increased benefits result in unemployment as they price people out of the market. I don’t think achieving higher than growth-rate increases in salaries are anything to be happy about. They directly contribute to high unemployment. I put it to you that it is economic growth, not union power, that has benefited employees over the last decades. Unions achieve regressive wealth redistribution (from the unemployed to the employed), whereas economic growth makes more capital available with which to employ people.

> Those with the resources (money) are usually the stronger side and can impose their will

Give me an example of where this results in employees being forced into contracts against their will, in today’s economy.

“When unions use collective action to achieve higher salaries and benefits, at a rate faster than economic growth, these increased benefits result in unemployment as they price people out of the market. “I don’t think achieving higher than growth-rate increases in salaries are anything to be happy about.”

We are not necessarily talking about higher than growth-rate increases. Very often union action simply serves to pressure employers into adjusting salaries etc. to increased profits. After all, we are seeing an increasing divergence of the distribution of wealth: fewer and fewer own more and more. Nothing could be clearer than that. What would the situation be without unions? Perhaps even greater divergence?

“it is the unions who have a monopoly over the labour market, not the employer.” This applies only if there is full or close to full employment (as presently the case in Australia). Otherwise workers might be forced to take any job at any conditions: the employer owns the big stick.